DR 98-043
New Hampshire Electric Cooperative, Inc.
1998/1999 Demand-Side Management Program
Order Approving Settlement Stipulation
O R D E R N O. 22,970
June 30, 1998
APPEARANCES: Dean, Rice & Kane by Anne Davidson,
Esq. for the New Hampshire Electric Cooperative, Inc.; David
W. Marshall, Esq. for the Conservation Law Foundation; Heidi
L. Kroll for the Governor's Office of Energy and Community
Services; Kenneth E. Traum for the Office of the Consumer
Advocate; and Eugene F. Sullivan, III, Esq. for the Staff of
the New Hampshire Public Utilities Commission.
I. PROCEDURAL HISTORY
On March 31, 1998, the New Hampshire Electric
Cooperative, Inc. (NHEC) filed with the New Hampshire Public
Utilities Commission (Commission) a petition for approval of
its Demand-Side Management (DSM) Program for the program
year July 1, 1998 through June 30, 1999. Included in the
petition is the supporting testimony of Robert L. Reals,
Jr., Manager of Energy Services, and Heather K. Saladino,
Manager of Rates & Financial Analysis.
NHEC proposes a 1998/1999 DSM Revenue Requirement
of $1,206,059 with $827,333 allocated for residential
programs and $378,726 allocated for commercial/industrial
programs. The proposed overall program budget is $1,412,278
with $206,219 allocated from base rates. The approved
1997/1998 overall program budget is $1,421,159. NHEC
intends to offer a program portfolio of the same ten
programs approved by the Commission for the 1997/1998
program year with only minor program modifications. The
programs were screened using the Total Resource Cost (TRC)
test, the method approved to evaluate the cost-effectiveness
of energy efficiency programs in New Hampshire, with
resulting TRC ratios ranging between 1.20 and 2.16.
By an Order of Notice issued April 3, 1998, the
Commission scheduled a prehearing conference and a first
technical session for April 29, 1998, set deadlines for
intervention requests and objections thereto, outlined a
procedural schedule, and required the Parties and Commission
Staff (Staff) to summarize their positions with regard to
the filing for the record. On April 20, 1998, the
Conservation Law Foundation (CLF) filed a Petition to
Intervene. On April 23, 1998, the Governor's Office of
Energy and Community Services (ECS) filed a Motion for
Limited Intervention. No party objected to either CLF's or
ECS's petition and the Commission granted their
interventions at the prehearing conference. The Office of
the Consumer Advocate (OCA) is a statutorily recognized
intervenor.
Pursuant to the procedural schedule, NHEC, CLF,
ECS, OCA and Staff engaged in formal discovery and technical
sessions. On May 27, 1998, Staff filed testimony and ECS
submitted written comments. On May 29, 1998, CLF filed
testimony. On June 5, 1998, NHEC, CLF, ECS, OCA and Staff
participated in a settlement conference. On June 10, 1998,
a Settlement Stipulation was filed with the Commission
signed by NHEC, OCA and Staff. On June 12, 1998, CLF and
ECS filed a Written Response to the proposed Settlement
Stipulation.
A hearing was held on June 17, 1998 at which time
testimony supporting the Settlement Stipulation was
presented to the Commission. Due to the unavailability of a
witness to sponsor their Written Response, CLF and ECS were
afforded the opportunity to submit late filed exhibits. On
June 19, 1998, CLF and ECS filed Exhibits 8 and 9,
respectively. On June 22, 1998, Staff filed supplemental
testimony. On June 23, 1998, NHEC submitted comments
regarding CLF's and ECS's late filed exhibits.
II. POSITIONS OF THE PARTIES AND STAFF
A. NHEC, OCA and STAFF
NHEC, OCA and Staff agreed that NHEC's 1998/1999
DSM Program, as set forth in NHEC's March 31, 1998 filing,
should be approved subject to the following modifications
outlined in the Settlement Stipulation filed with the
Commission on June 10, 1998:
1. As proposed by Staff, one full-time equivalent position, in
the amount of $53,560, will be recovered through the DSM
surcharges. As a result of the recovery of the $53,560 from
the proposed surcharges, the proposed DSM surcharge for the
Residential Class will be $0.00159 per kilowatt-hour (kWh);
the proposed DSM surcharge for the General Class will be
$0.00229/kWh; and the proposed DSM surcharge for the Primary
General Class will be $0.00229/kWh. NHEC's proposed DSM
revenue requirement increases from $1,206,059 to $1,259,619
due to the reallocation of $53,560 to the DSM surcharges.
2. NHEC, OCA and Staff can petition the Commission to revisit
NHEC's 1998/1999 DSM Program Proposal based upon the
progress of the proceedings in the Restructuring Docket, DR
96-150, and the impact of that proceeding on NHEC's DSM
programs. NHEC agrees that it will provide disclosure to
its members concerning the proceedings in the Restructuring
Docket and the resulting uncertainty of the benefit of some
of the DSM programs.
B. CLF and ECS
CLF and ECS agreed in part and disagreed in part
with the Settlement Stipulation filed by NHEC, OCA and
Staff. Their position, as outlined in their June 12, 1998
Written Response, is summarized below:
1. CLF and ECS support the proposal in the Settlement
Stipulation to continue to recover $53,560 in costs
associated with a DSM full time equivalent through the DSM
surcharges rather than through base rates. CLF and ECS also
agree, in general, with that aspect of the proposed
Settlement Agreement that would allow the parties to
petition the Commission to revisit NHEC's 1998/1999 DSM
programs based upon the progress of the Restructuring
Docket. However, CLF and ECS request that permission to
petition the Commission not be restricted solely to NHEC,
OCA and Staff but would be extended to all interested
parties, and any petition filed with the Commission should
be addressed in the context of an adjudicatory proceeding in
which intervenors may participate.
2. CLF and ECS do not support the proposal in the Settlement
Stipulation that would allow NHEC to use the expected
balance of $261,604 in underspending from program year
1997/1998 to reduce its class-specific DSM surcharges in
program year 1998/1999. CLF and ECS recommend that the
Commission instruct NHEC to maintain its current
class-specific DSM surcharges during the period when the
Energy Efficiency Working Group's recommendations are being
formulated and acted upon. Furthermore, they recommend that
the Commission direct NHEC to use at least some portion of
the carryover of roughly $260,000 to participate in regional
and national market transformation initiatives and to
improve the design of its existing programs.
At the hearing, CLF clarified its and ECS's
position. CLF and ECS request that the Commission approve
the current DSM surcharges effective through the 1998/1999
program year. The revenues generated by the current DSM
surcharges at the 1998 kWh sales forecast plus the expected
overrecovery of $261,604 creates a 1998/1999 program year
budget of $1,327,999 (exclusive of $152,859 in base rates).
Thus, CLF and ECS request an additional $68,380 beyond the
revenue requirement advocated by NHEC, OCA and Staff. CLF
and ECS recommend that the Commission use the $68,380 to
support NHEC's involvement in five regional market
transformation initiatives facilitated by the Northeast
Energy Efficiency Partnerships and to increase the average
customer weatherization package in the Low Income Program
from $800 to $1,065 and to increase the $1,000 member cap to
$1,500.
III. COMMISSION ANALYSIS
After careful review of the entire record in this
docket, we find that the Settlement Stipulation filed by
NHEC, OCA and Staff is reasonable and is in the public good.
We will approve NHEC's 1998/1999 DSM Program subject to the
terms outlined in the Settlement Stipulation.
We believe that it is premature to order NHEC to
increase its program budget and to expand its 1998/1999 DSM
Program to include the market transformation initiatives
proposed by CLF and ECS. In our March 20, 1998 order on
rehearing in our restructuring docket, DR 96-150, we
established a working group to examine a number of issues
related to energy efficiency programs and to report back to
us with recommendations. We further directed utilities to
cap their program funding at existing levels until we have
received and ruled upon the working group's recommendations.
We continue to believe that is the correct approach.
The Settlement Stipulation appropriately addresses
NHEC's current filing. NHEC's budget is approximate to the
level we approved in NHEC's 1997/1998 DSM Program docket and
is consistent with our order on rehearing which caps
"program funding at existing levels until we have received
and ruled upon the working group's recommendations." By
existing levels, we refer to the latest approved budget and
not to the DSM cost recovery mechanisms which may not
accurately reflect the program costs due to prior year
over/underrecoveries and variances in the sales forecasts
used to calculate the surcharges. The budget level of
$1,412,278 is consistent with the approved budget for the
1997/1998 program year and should be achievable given NHEC's
historical spending. However, we encourage NHEC to continue
to find ways of obtaining its energy and capacity saving
goals while spending less ratepayer funds.
Finally, consistent with treatment we have
recently allowed for Granite State Electric Company in
Docket DR 97-211 in Order No. 22,818 (January 2, 1998), we
waive the application of N.H. Admin. Rules, Puc 1203.05(a),
which requires generally that rate changes be implemented on
a service-rendered basis, and will allow NHEC to implement
its DSM surcharges on a bills-rendered basis. This waiver,
pursuant to Puc 201.05, produces a result consistent with
the principles embodied in Puc 1203.05(b), which sets forth
exceptions for allowing rate changes on a bills-rendered
basis, and is in the public interest because it eliminates
consumer confusion and reduces administrative costs.
Based upon the foregoing, it is hereby
ORDERED, that NHEC's 1998/1999 DSM Program is
APPROVED as modified by the Settlement Stipulation; and it
is
FURTHER ORDERED, that effective July 1, 1998 on a
bills-rendered basis, the Residential Class DSM surcharge
shall be $0.00159/kWh, the General Class DSM surcharge shall
be $0.00229/kWh, and the Primary General Class DSM surcharge
shall be $0.00229/kWh; and it is
FURTHER ORDERED, that NHEC shall file compliance
tariff pages within ten days of the date of this order.
By order of the Public Utilities Commission of New
Hampshire this thirtieth day of June, 1998.
Douglas L. Patch Bruce B. Ellsworth Susan S. Geiger
Chairman Commissioner Commissioner
Attested by:
Thomas B. Getz
Executive Director and Secretary